Citizen Dave: Free beer for the rest of your life!

At the Citistates conference in New Hampshire, I met a young blogger named Sam Newberg, who publishes Urban Joe, a blog about urbanism in the Twin Cities. Sam told me about some young entrepreneurs in his neighborhood who wanted to open a brewpub and they needed three quarters of a million dollars in capital to get started. They were almost there when a major investor dropped out.

No problem. They went to the neighborhood association with a deal that could not be refused: individual neighbors could put up $1,000 and drink beer for free at the pub for the rest of their lives. Their goal was to raise $150,000. They took in $200,000 in three weeks.

Turns out people had the option of taking the free beer or a stake in the business. In what might have been the stupidest question in the history of journalism, I asked Sam why he chose the beer. He had a good blogger's come back. "Because it made a better story."

Newberg also talked about the "Norm factor." Northbound is a place he goes where everybody knows his name. Now the neighborhood has a cozy place to go and the good feeling to know that they helped make it happen. And there's a community-based stipulation on the free beer. It's only good on growlers, which means that you probably won't drink alone.

The pub opened in September, so ten months into it I asked Sam how he was doing on drinking back his investment. He’s only $200 into it, which would make the payback period about four or five years. Not bad, but Sam says that some of his neighbors were into the gravy period months ago.

We flirted with something like this in Madison about a decade ago when the Ken Kopps grocery store on Monroe Street closed and neighbors raised about $100,000 to invest in a replacement store. But nobody was going to get free granola for life. (Eventually, Trader Joe's opened on the site thanks to a tax incremental district.)

The serious point here is that this kind of neighborhood-driven, ultra-local crowd sourcing has all kinds of potential applications all over the place. And if we can add good beer to the deal, so much the better.